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Last year I wrote a white paper titled “Today’s Market Strategies for Tomorrow’s Market Leaders” that received a good amount of attention and distribution around the country.  As I look toward 2010, it is only natural to review last year’s document to see what, if anything has changed.

Originally I made a bold prediction that 40% of the commercial real estate brokers would leave the industry by December 2011.  With the low velocity outlook for the foreseeable future, I stand by this prediction.  This is actually good news to those that are committed to their craft.  But what strategies should you put in place to ensure you are part of the remaining 60%?

During the aforementioned white paper I outlined several fundamental approaches to capture, if not maintain, market share in 2009.  Over the past several weeks I had the pleasure of interviewing and surveying scores of top CRE professionals around the country.  It is quite apparent that those who found, maintained or created success attribute it to a refocus on fundamentals.  Yes, this may not seem cutting edge, but it amazes me how so many brokers focus on the transaction and not the business behind the finding, winning and fulfilling of the transaction.

So what are the strategies for success in 2010?  Thankfully, more brokers are recognizing that, like the thousand fitness gimmicks we seem to see on TV during the turn of the year, there is no such thing as a “quick fix” in commercial real estate.  The difference between “Top Performers” and everyone else is simple – they PERFORM these strategies and tactics more consistently regardless of market conditions.

Brokers have little choice but to adapt or join the 40% of their peers that will leave the industry.  Adaption is the transformation of living deal to deal to the creation of a foundation of success.    Craft a plan to address the opportunities of the market place.   Stop spending 100% of your time working IN your business, and spend at least 10% of everyday working ON your business.

Fundamentals will continue to be the foundation of CRE’s top performers.  However fundamentals can’t be applied only when convenient or seemingly necessary.  There is a reason that top performers have a “Fundamentally Sound Business” and are not simply a broker who closed some deals.

Yep, there goes another one.  Can you hear it?  The attrition in the commercial real estate brokerage industry is rising higher than the Mississippi River in rainy season.  The Jack Welshian theorist would suggest brokerage attrition is a good thing.  Too many of them, too few deals to go around.  The deer hunters, which admittedly I am not, would say it’s only humane to parse the herd.

Depending on whom you believe, commercial brokers numbered close to 130,000 in 2006.  Think about that, 130,000!  According to Real Capital Analytics there were over 16,000 commercial real estate transactions in 2006.  Now RCA numbers at that time only reflected deals over $5 million (they now reflect deals over $2.5 million),   However a vast majority of CRE transactions are less than $5million, so let’s assume there were 3x the number of transactions less than $5M, that would be a total of 64,000 transactions – yes I know this number is too high, but bear with me.  That would be there was far less than 1 transaction completed per broker. 

Now, here is the scary part.  According to Real Capital Analytics, only 2,500 transactions closed through October 2009!  2,500!  No wonder it seems like there is a run on deer hunting licenses down at Town Hall.    Also consider that it was estimated that less than 20% of all commission dollars were earned by 80% of the brokers.  This means the established brokers continue to gain market share.

But, here is the good news.  The market does not control the number of brokers serving it.  The individual broker controls their positioning in the market.  It is the individual broker who ultimately decides, as an independent contractor, if they are going to run their career like a business owner and separate themselves from the pack or simply run after deals.  If the decision is the later, heed this warning.  It’s is deer season and the hunters are gathering.  Run Forest Run!

Fortunately Warren also shared with his audience that the summer months were a bad time to sell, as everyone is focusing on vacations and of course, Mondays are a bad time to call because everyone is focusing on the new week.  Oh, yeah Friday’s are bad too because prospects are focusing on the weekend.  Warren did identify a certain Wednesday afternoon in May that was probably the ideal time to prospect.  Thank you Warren!  I have that afternoon marked on my calendar for 2010, and I can’t wait to start calling!

The clarity in Warren’s sarcasm is blinding.  It amazes me how so many commercial real estate brokers approach these final weeks of December, as if no deals are going to happen.  It’s not about closing a deal before the year end, but about educating your prospects in regards to opportunities ahead.  The only time I find the brokerage velocity slower is during the month of August when it seems everyone is on vacation.  However, when you look at the deal velocity in September through November, it is obvious that someone was working in August and laying the seeds for earning greater commissions.

The vocation of commercial real estate is obviously not decided on a Wednesday afternoon in May.  The opportunities are out there for the taking.  It is up to you to educate your prospects and share with them why you are the ideal advisor to trust in today’s market place. 

I wish everyone the safest and happiest of holidays.  Just don’t celebrate for an entire month.

To no one’s surprise commercial real estate insiders are projecting that 2010 will not be significantly better than 2009.  The real question of course is what is the projection for your personal brokerage business?  Does the declining velocity in your market correlate to declining commissions for you?

It would be easy to provide you a simply answer, however the answer varies bases on market, focus, level of experience, dedication to your business and yes your personal brand and personal marketing plan.  In 2009 has shown the same level of failure in new-to-business brokers as seasoned industry veterans.  The same holds true for the levels of success.  Many new to the business brokers have out produced their seasoned veterans.

It is also true that many commercial real estate brokers have had extremely rewarding years in 2009.  They have leveraged their market presence, existing client relationships and current market conditions to identify new opportunities, and in many times for new clients.

The obvious road to greater commissions has been targeting banking relationships, and pursuing the economic stability that property management and leasing can provide.  The less than obvious strategies, albeit more fruitful have been a based on a longer term perspective of crafting a social marketing campaign and leverage spheres of influence beyond the typical commercial real estate sector.  It is the later who will benefit more from the coma-like economy.

Likewise, as many commercial practitioners begin to falter and leave the commercial real estate brokerage arena, those who are dedicated to their craft will continue to increase their market share.

With that said, here are some proven strategies for identifying opportunities in the market, no matter the economic outlook:

• Thoroughly examine market velocity in all sectors. Not just what was sold or leased, but what was/is for sale and for lease.
• Thoroughly examine your historical commission generation by source, property type, client and activity.
• Examine your database – yes look through all 50 or all 15,000 and determine the relationship, opportunity and/or marketing campaign required for EACH and EVERY contact. By the way, this is also a great time and approach to purging or updating your information.

From these three simply steps, you will identify opportunities that you have not considered in the past.  You will identify clients, market niches and trends where commissions can be generated.

The market will not be significantly better in 2010.  Will you?